Oakland to cap annual rent increases at 10 percent

OAKLAND -- The City Council voted to strengthen Oakland's rent control law Tuesday, capping annual rent increases at 10 percent and denying landlords the right to pass along the entire cost of building upgrades to tenants.

The new rules provide tenants in Oakland's roughly 60,000 rent-controlled units with safeguards that are similar, albeit still not as strong, as those found in several other cities with rent control. They also mark one of the council's first efforts to address concerns about long-term residents being pushed out of the city by rising rents.

"Tonight we made tremendous gains for Oakland tenants and for protecting Oakland's diverse neighborhoods," Councilwoman Libby Schaaf said after the vote. "Every family living in (rent-controlled) housing can go to bed with the security of knowing that they will never have more than a 10 percent rent increase."

The new rules, which had the backing of several prominent landlord and tenant leaders, are scheduled to take effect this summer after the council signs off on them in a second vote next month.

With rents on vacant units soaring in many parts of the city, tenant groups had pressed for changes to Oakland's rent law. They focused on a provision that allows landlords to make tenants pay for improvements such as paint jobs, seismic retrofits, new flooring or a new refrigerator in the form of temporary rent hikes.

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Last month, Clifton and Mercedes Harrison were hit with a 112 percent rent increase to offset the cost of improvements to the Adams Point district apartment they have lived in for 26 years.

Tenant leaders said it was unfair for landlords to make tenants bear the brunt of building improvements that also increased the value of their properties. They also warned that landlords could exploit the rule to force out long-term tenants who pay below market rents.

Landlords had countered that most rent increases imposed for building improvements were relatively low and that without them, Oakland's restrictions on rent increases for existing tenants would make it financially impractical for property owners to maintain and upgrade their buildings.

For existing tenants in rent-controlled homes, rent increases are tied to the Consumer Price Index. The index has increased far more slowly than rents on unregulated vacant apartments.

During meetings convened Tuesday by council members Schaaf and Larry Reid, tenant and landlord leaders reached an agreement on reforms aimed at preventing massive rent increases on long-term tenants, such as the Harrisons.

The new rules limit total yearly rent increases to 10 percent while lengthening the period during which landlords can recoup the costs for more expensive upgrades. Additionally, rents will not be allowed to rise more than 30 percent over a five-year period.

Negotiators also agreed that landlords will be required to file paperwork with the city when they seek to increase rent for building upgrades so that city officials can track the rent increases for signs of abuse.

With the two sides unable to agree on the percentage of expenditures that landlords could pass onto tenants for building upgrades, the council agreed to lower it from 100 percent to 70 percent.

The new rules are still not as tenant friendly as rent control laws in Los Angeles, San Francisco and Berkeley. Those cities further limit the pass through of building upgrade expenses to tenants.

Clifton Harrison, who will still face a doubling of his rent, said he wished council members had taken a tougher stand for tenants but considered the compromise as a good step forward. "You can't get everything all at once," he said. "At least the sentiment is changing."